Mango Markets closes after SEC settlement and legal issues

Mango Markets, a decentralized exchange (DEX) based on the Solana (CRYPTO:SOL) blockchain, has announced its shutdown following a settlement with the U.S. Securities and Exchange Commission (SEC). 

On January 11, 2025, the platform informed users via its X account that it would be ceasing operations and advised them to close their positions. 

This decision follows governance proposals aimed at adjusting interest rates and collateral requirements, effectively ending borrowing and lending activities on the platform. 

These proposals received unanimous support and are set to take effect on January 13. 

The closure is a direct result of an SEC settlement reached in September 2024, where the agency filed charges against Mango DAO and the Blockworks Foundation for selling unregistered securities. 

The SEC alleged that Mango raised over $70 million by selling MNGO governance tokens in August 2021, violating the Securities Act of 1933. 

Additionally, Mango Labs was accused of operating as an unregistered broker, breaching the Securities Exchange Act of 1934. 

As part of the settlement, Mango's DAO agreed to pay $700,000 in civil penalties, destroy MNGO tokens, and request exchanges to delist these tokens. 

Jorge Tenreiro, chief of the SEC’s Crypto Assets and Cyber Unit, stated, “Since the inception of our crypto enforcement program, our view has been that the label ‘DAO’ does not change the reality of who is behind a project.” 

Mango Markets was launched in August 2021 by founders Maximilian Schneider, Britt Cyr, and John Kramer to provide fast trading and borrowing services. 

However, following an exploit in October 2022 where over $100 million was drained from the platform by trader Avraham Eisenberg, Mango faced significant financial challenges. 

Eisenberg returned $67 million but retained $40 million before being arrested by U.S. authorities in December 2022 on charges of fraud and market manipulation. 

His sentencing has been postponed multiple times as he faces a maximum of 20 years in prison along with potential civil actions from regulatory bodies.

At the time of reporting, the Mango (MNGO) price was $0.01858.